An ACA alternative takes shape

As contentious as the debate over health care policy can be, there are a handful of truths that seem largely incontrovertible. First, Republicans hate the Affordable Care Act, or at least claim to, with the heat of a thousand suns. Second, GOP lawmakers insist they don’t want to go back to the old system and prefer to replace “Obamacare” with a conservative alternative.

And third, congressional Republicans have struggled mightily when it comes to putting together an actual reform plan of their own.

With this in mind, Sens. Richard Burr (R-N.C.), Tom Coburn (R-Okla.), and Orrin Hatch (R-Utah) deserve some credit for moving past stale soundbites and vague slogans. The trio presented an actual health care reform plan of their own last week, called the “Patient Choice, Affordability, Responsibility, and Empowerment (CARE)” Act.

Is there a bill ready for public scrutiny? Well, no, not yet, but there is a relatively detailed white paper (pdf) available, sketching out how the proposal would work if adopted. After several years of rhetoric, these GOP senators and their aides took the debate seriously enough to present a semi-serious plan, which is something very few Republican lawmakers have been willing to do.

To be sure, there is roughly zero chance the CARE Act will actually become law. In fact, since its unveiling, no other Republicans in Congress have been willing to endorse the Burr/Coburn/Hatch proposal as their own. This is important, in part because it speaks to the bill’s prospects, and in part because it’d be unfair to start characterizing this as “the Republican alternative to Obamacare.” It’s not. It’s a rough blueprint from three GOP senators who were willing, in legislative terms, to put their money where their mouth is.

Given that the CARE Act isn’t going to pass, it’s reasonable to ask why anyone would bother scrutinizing it in the first place. But I’m of the opinion that after five years of often mind-numbing debate over health care, the public benefits from understanding what various policymakers would do if given a chance. Too often, lawmakers revel in a post-policy phase and fail to bother with anything more sophisticated than a bumper sticker. These senators went to the trouble of writing a plan, so those who take health care seriously should go to the trouble of reading it.

Before we get into why, exactly, the CARE Act is a pretty horrible approach to health care reform, let’s pause to note one of the main reasons it’s taken so long for Republican alternatives to take shape and why, to this day, there is still no agreed upon alternative embraced by GOP leaders in both chambers: because the Affordable Care Act, or at least something close to it, was the Republican alternative.

Remember, the left wanted single-payer; the right wanted a system that relied on private insurers. When President Obama backed the moderate course that disrupted the status quo as little as possible, he was effectively building his model on a GOP chassis – which made it all the more bizarre when Republicans decided “Obamacare” was an outrageous, socialist scheme.

It meant, among other things, that when GOP lawmakers presented alternatives to the Affordable Care Act, they’d have to pursue plans well to the right of ideas Republicans actually liked up until Obama became president.

The plan would repeal the Affordable Care Act and substitute an alternative that would likely cover fewer uninsured people, raise premiums for many older adults, shrink Medicaid, cut back on subsidies for middle class Americans, scale back protections for people with pre-existing conditions, and allow private insurers to escape many of the consumer-friendly requirements now imposed on them.

Not surprisingly, a handful of the most popular parts of the ACA would be carried over – lifetime caps would still be eliminated and young adults could stay on their family plans until they turn 26 – and so would some of the unpopular parts. Remember in 2010 and 2012 when Republicans ran attack ads accusing Democrats of “cutting Medicare” by $700 billion? The CARE Act keeps those “cuts” in place.

But that’s roughly where the similarities end.

The CARE Act, for example, would end Medicaid expansion. It would also eliminate exchange marketplaces in which private plans compete for consumers’ business. Private insurers could go back to imposing annual caps on consumers, charging women more than men, and charging more for preventive care like mammograms. Consumers with pre-existing conditions wouldn’t be locked out, just so long as there’s no break in the continuity of coverage – if a consumer allowed even a brief lapse in coverage, for example between jobs, an insurer would be able to charge exorbitant rates to cover pre-existing conditions, which is precisely what the ACA prohibits.

Currently, employer-sponsored health insurance is tax free; the Republican plan would make employees pay income tax on at least 35 percent of what their company pays for their plan. The idea is to make patients pay more for their coverage, giving them an incentive to choose cheaper health insurance plans with more deductibles and co-payments, which, in turn, would encourage them to shop around for cheaper tests and treatments and forgo unnecessary ones.

On a more individual level, this is what the Republican plan means: If you are one of the 150 million Americans who get their health insurance through an employer-sponsored plan, get ready for a big tax increase. For a family in the 28 percent tax bracket (earning around $150,000 per year), according to my calculations, it would add up to about $1,470 per year.

Over the years, I (and others) made the argument many times that Republican approach to health care is predicated on a bizarre assumption: Americans already have too much health insurance. The CARE Act helps prove the point.

Under the Affordable Care Act, consumers who are covered through their employers aren’t affected too much – the main differences are vastly improved consumer protections and the peace of mind that comes with knowing that you and your family won’t be screwed if you lose your job. Under this Republican alternative, those same consumers would, by design, face higher costs.

And since this GOP plan reduces the tax deduction for employer-based coverage, let’s be clear that we’re talking about a Republican policy that raises taxes (if we’re doing policy analysis by Republican rules).

What we’re left with is a genuine mess. The Burr/Coburn/Hatch bill covers fewer people and leaves more consumers with worse insurance. It would send cancelation notices to millions. It would force tens of millions to pay more for the coverage they already have. It would strip families of consumer protections that now exist, including a return to insurers charging women more than men. It would impose new risks on those with pre-existing conditions.

Jonathan Cohn’s conclusion rings true: “[T]he authors of the Patient CARE Act and many of their allies are acting as if conservatives have some magic elixir for health care problems – a way to provide the same kind of security that the Affordable Care Act will, but with a lot less interference in the market and a lot less taxpayer money. It’s all the goodies of liberal health care reform, they imply, but without the unpleasant parts. They’re wrong.”

If assurances from GOP leaders are true, there are other alternatives to “Obamacare” on the horizons, including one that will enjoy the backing of the House Republican leadership. But the underlying problem – conservative policymakers assume they can succeed in helping consumers with an approach that refuses to make real investments and eschews consumer safeguards – all but guarantees that the Affordable Care Act will always be the superior alternative.